A tiny oil driller has surged 249% in just 6 days as a newly minted meme stock amid Reddit speculation of a short squeeze

• Torchlight surged 249% in just six days of trading amid retail-trader interest.
• Retail traders touted opportunity for profit in the stock with the dividend or a short squeeze.
• The Texas oil driller extended the deadline to merge with Metamaterial in order to pay out a dividend.

Shares of a tiny Texas oil driller have more than tripled in price in a week amid hype from retail investors around a short-seller squeeze and an upcoming dividend.

Plano, Texas-based Torchlight Energy Resources has soared 249% in just six days of trading as the company has moved to the top-trending stock on Reddit investing threads like Wall Street Bets, which has more than 10 million members.

On Monday alone, the stock rallied as much as 58% to end Monday's trading session at $9.92.

Torchlight announced plans in December to combine with Dartmouth, Canada-based Metamaterial, which researches and develops advanced materials and photonics. Monday, the oil driller said it would extend the deal's closing date to June 30 to provide time to pay a preferred stock dividend to Torchlight shareholders on June 25.

On Wall Street Bets, retail traders touted the opportunity to make money off the stock from dividends and a short squeeze. The words "dividend," "short," and "squeeze" were several of the top mentioned words about the stock on Reddit investing threads, HypeEquity data showed.

"You can either make money on the squeeze, or make money if it crashes by absorbing the dividends. Either way you hold another day you win," said one Redditor, with 5,000 "comment karma" points.

The Redditor, who has been trading for about a year, told Insider he "hopped on board" with the stock after seeing mentions on Reddit and a pre-market rally. The Redditor bought about $2,000 worth of shares, according to a screenshot viewed by Insider.

The stock has a 26% short-interest volume, according to data from Fintel.io. In the past, Reddit traders have targeted stocks with high short-interest rates in an effort to drive up the price and force short sellers to cover their positions at a loss, better known as a short squeeze. Since the trend began with GameStop stock earlier this year, many short sellers have ditched their bearish bets on small- to mid-size companies.

The company said last month it may go out of business, as it's lost almost $114 million since its birth and expects to lose more in the future, Bloomberg reported, citing a federal filing. The company did not immediately respond to Insider's request for comment about the runup in its share price or the federal filing.